For the 2026-27 ethanol supply year (November 2026 to October 2027), the government has directed that sugar diversion for ethanol be zero. Oil marketing companies will not buy ethanol made from sugarcane juice, sugar syrup or B-heavy molasses.

Not directly. It works through the terms of the oil companies' ethanol procurement tender, issued on 16 October 2026, which does not invite bids for sugar-based ethanol.

To keep more sugar available at home. Sugar output for 2025-26 fell to about 306 lakh tonnes against an early estimate of about 343 lakh tonnes, and retail prices rose about 15.6% between 20 July and 20 August 2026.

No. Oil companies have sought about 1,100 crore litres of ethanol for 2026-27, mainly from maize, rice and C-heavy molasses, to continue 20% blending.

B-heavy molasses is left after the second round of sugar-making and still holds recoverable sugar. C-heavy molasses is the final leftover, so using it for ethanol does not reduce sugar output.

Mills will sell more sugar but earn less from ethanol, which had provided quicker cash for farmer payments and loan repayments. Maharashtra's mills estimate a revenue hit of over ₹7,000 crore.

Yes. In December 2023, the government barred cane juice and syrup for ethanol, then eased it to a 17 lakh tonne cap about a week later. The cap was lifted in August 2024.

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